09:48 SINOTRONICS<01195> - Announcement & Resumption (3) Conversion shares: The Original Tranche 1 Bonds (and the Additional Tranche 1 Bonds, if issued) are convertible into new Shares at the election of CSFB at either (i) the Fixed Conversion Price, or (ii) the Floating Conversion Price, in each case at any time during the relevant conversion period (as set out above). Such Shares which fall to be issued on conversion of the Bonds shall rank pari passu in all respects with Shares in issue on the date of issue of such Shares pursuant to the conversion. Early Redemption: If at any time during the relevant conversion period (as set out above), the closing price per Share is less than or equal to 65% of the Base Price (the ``Downside Price'') on a business day, the Company may redeem any Bonds presented for conversion on the immediate following date in cash in an amount equal to the number of days elapsed from (and including) the relevant closing date to (and including) the date of redemption of the Bonds divided by 365 multiplied by 6% of the principal amount of the Bonds and then plus the principal amount of the Bonds plus all the interest accrued on the Bonds presented for conversion to the date of redemption (the ``Downside Option''). In respect of the Original Tranche 1 Bonds, the Downside Price is approximately HK$0.59. Discretion is vested on the Company to consider whether or not to exercise the Downside Option. CSFB agrees that the Company is at a discretion to exercise the Downside Option pursuant to the Subscription Agreement. In determining whether the Company will exercise such right, the Directors will consider, among others, the market condition and the interests of the Company and the Shareholders as a whole including any dilution effect on the Shareholders. If at any time during the relevant conversion period (as set out above), the closing price per Share is less than or equal to 40% of the Base Price (the ``Put Price'') for 10 consecutive business days, the Company agree that CSFB shall not have the right at such time to require the Company to convert any Bond at conversion price less than or equal to the Put Price and further agree that CSFB may, by giving not less than 5 business days' notice to the Company, require the Company to redeem the Bonds in cash in an amount equal to 100% of the principal amount of the Bonds plus accrued interests, provided that the Company shall not be required to redeem Bonds of principal amount of more than US$2,000,000 in any calendar month. In respect of the Tranche 1 Bonds, the Put Price is approximately HK$0.36 per Share. The above terms have been agreed between the Company and CSFB after arm's length negotiations. Conditions: The obligation of CSFB to subscribe the Original Tranche 1 Bonds and the Additional Tranche 1 Bonds is conditional on, among other things, the satisfaction of certain conditions, including: (i) if required under the applicable laws and rules of the relevant regulatory body, the obtaining of the approval from the shareholders of the Company for the issue of the relevant Bonds and/or the issue and allotment of the new Shares and/or the conversion of the relevant Bonds into Shares not less than one business day prior to the closing date for the relevant Bonds; and (ii) the delivery by the Company to CSFB of certain documents specified in the Subscription Agreement by the closing date for the relevant Bonds. These documents include legal opinions in relation to, inter alia, the due incorporation of the Company, the power and authority of the Company to enter into the Subscription Agreement and whether consent or approval of any authority in the Cayman Islands is required for the execution of the Subscription Agreement and a comfort letter from the auditors of the Company in relation to the financial position of the Company (including whether there was any significant events which had a material impact on the borrowings of the Group or issued share capital of the Company since the last audited financial statements of the Company). Failure to obtain listing approval: If the Company has not obtained approval from the Stock Exchange for the listing on the Stock Exchange of the new Shares to be issued upon conversion of any of the Bonds and the number of Shares that could be required to be issued under the terms of the relevant Bonds by no later than 14 calendar days after the relevant closing date for the Bonds, then upon not less than 2 business days' written notice, CSFB may require the Company to repurchase all of the relevant Bonds held by it at 110 per cent. of their principal amount plus accrued interest.